Zim News Blog -NEWS NETWORK

Source: Who will defend the defenceless?. . .as rogue police, soldiers turn to crime | Daily News

More and more members of the security services are being arraigned before the courts for playing a major role in perpetrating blue-collar and violent crime.

Analysts attribute the breakdown of discipline to the worsening economic crisis, the fractured nature of national politics and the culture of impunity by the new dispensation.

Soldiers and cops’ involvement in perpetrating violence in private spaces, crime and other nefarious activities comes as the rise in the cost of living is pushing many into destitution.

The worsening economic conditions have not spared poorly paid law enforcement agents who, in their quest to survive and keep their families going, are breaking the very laws they should be upholding.

In the recent past, police and soldiers have been captured on social media committing heinous crimes that society expects them to guard against.

Criminal acts by members of the security forces range from opportunistic theft, armed robberies, fraud, sexual assault to police collusion with bosses of organised criminal syndicates.

And the problem is cutting across the entire gamut of the security service.

Just last week, an officer-in-charge at Borrowdale Police Station, Simbarashe Sibanda was jailed for four years for attempting to murder his lover.

In Guruve, a soldier, Wayne Masaiti, 26, shot a civilian during a robbery and seized his $6 000 bond notes and US$200.

These cases are just a tip of an iceberg of burgeoning criminal activities being perpetrated by law enforcement agents, with some going unreported as victims fear victimisation.

Experts in the security and legal fraternity said the phenomena was difficult to understand, with some struggling to give an explanation how the dying economy is possibly pushing members of the security forces into committing attempted murder or assaults in aggravating circumstances.

The Zimbabwe National Army and the Zimbabwe Republic Police have blamed army, police deserters and retirees for the rising crime, which spiked during fuel riots in January.

“The Zimbabwe Defence Forces and Security Services have noted with grave concern an increase in cases of people committing crime particularly robberies whilst clad in military/police regalia,” the two security units said in a recent joint statement.

“Some of these uniforms worn by criminals were seized by rogue elements during the recent riots in Epworth and Chegutu. A case in point is a recent arrest of five armed robbers in Epworth; Harare on January 14 2019, who were using police and military regalia to commit armed robberies, after hiring vehicles from car rental companies. We are therefore giving an ultimatum to individuals who have retired, deserted, absented themselves without official leave (AWOL) from service to immediately handover uniforms either to the police or the Zimbabwe Defence Forces.

“All those who do not comply with this directive will be flushed out by already deployed members of the security services. We are also appealing to members of the public who have information on such people who are not serving members and are abusing military/police regalia to report to the police.”

As the security agencies shirk responsibility, there has been a concomitant decline in public trust in the security forces.

According to a recent Afrobarometer survey, the majority of Zimbabweans perceive the police as the most corrupt institution in the country, with one in four survey respondents who had contact with the police saying they paid a bribe to obtain a service or to avoid problems.

University of Zimbabwe War and Strategic Studies lecturer Wesley Mwatwara said the breakdown of discipline within the lower ranks of the security services should be viewed in terms of the general economic challenges that afflict the present Zimbabwean society.

“We have a very complex situation playing right before us. It cannot be explained in monocausal terms as there are a number of variables at play,” Mwatwara told the Daily News on Sunday.

“Whereas these security elements have been at the forefront of spearheading the crushing of any opposition to the present government, the reality is that these same officers are not insulated from the economic crises bedevilling us.

“In this context, it is possible to view the recent trend in the rise in criminality by members of the security services as an attempt to eke out or forge a living in an otherwise dwindling economic space.”

Mwatwara said there was need for security sector reform saying it was evident that political influences were at play.

“Furthermore, the fractured nature of our national politics plays out also in the national security services. The history is there for everyone to see, especially in light of the acrimonious relations between members of the police service and the military.

“In addition, like the police, the President’s Department also seems to be side-lined for its allegiance to the previous regime.  When looked at from this vantage point, it would appear that the breakdown of discipline is partly linked to the culture of impunity which the new dispensation unwittingly or wittingly cultivated.

“The creation of a truly professional security apparatus is long overdue. Such a programme, one can only hope cascades down to the individual security officer – soldier, policemen or state agent – and instil in them professional values.”

Lawyer and MDC legislator Job Sikhala said poverty was the major driving factor in perpetration of crimes by law enforcement agents.

“They are living under difficult and pathetic conditions, given

slavery salaries and own almost nothing. They are always in debt through borrowing from micro finance institutions and hardly afford a suit to look gentlemanly when off duty,” Sikhala told the Daily News on Sunday.

“They always buy from bhero (second hand clothes) and are perpetually traumatized. I will tell you that a man who wakes up in the morning going to work and fail to support his family always turns violent; hence end up committing crimes such as attempted murder.

“Their behaviour, compounded by their penchant to abuse human rights, leaves them outcasts in the society. No one buys them beer anymore or assist them with lifts to and from work. So, the society must always be in full alert of these people. They have become dangerous.”

MDC spokesperson and lawyer Jacob Mafume said it was difficult to curtail incidences of law enforcement agents that engage in crime if the financial situation was not addressed.

“The whole country has become problematic in the sense that if you don’t pay police well, they have no other source of income and are required to be stationed where they are. The whole country will be reduced to a criminal enterprise as they seek to make ends meet,” Mafume said.

“Our minister of Finance is lying about the cost of goods, value of salaries and only interested with coming up with statistics that have no reflection of what is happening on the ground. This will hit the security sector very fast. Where do they expect soldiers to get money or police officers? They will resort to use the skills that have been trained to sustain themselves.”

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Source: Poor rains choke tobacco production | Sunday Mail (Business)

Martin Kadzere

Zimbabwe expects production of its largest single foreign currency earner tobacco to fall this season as erratic rains in the eastern parts of the country affected output.

The country produced a record  253 million kilogrammes of the golden leaf last year, but poor rains badly affected the crop in most parts of Manicaland and Masholaland East provinces the Tobacco Industry and Marketing Board chief executive officer Dr Andrew Matibiri told The Sunday Mail Business in an interview on Thursday.

Where climatic conditions were favourable, output and quality would be “much better,” he said.

“The situation is so dire in Manicaland and Mashonaland East Provinces where the rainfall patterns were not so good and as a result, we won’t get much as last year’s record crop but we will be over 200 million kg,” Dr Matibiri said.

The TIMB was finalising a crop assessment to give the estimated tobacco output for this year.

Tobacco is largely grown by small scale farmers in Zimbabwe, who are mostly financed by private companies as they lack collateral to borrow money from banks. President of Zimbabwe Farmers Union Mr Paul Zakaria said given that the affected provinces were traditionally among top producers of tobacco, output would drop.

“The late onset of the rains, compounded by prolonged dry spells during the season, is really going to affect production,” said Mr Zakaria in an interview on Friday.

“We are certainly not going to surpass the 253 million kilogrammes we achieved last year.”

The Zimbabwe Tobacco Association is expected to hold a council meeting early this week to get feedback from its members on the impact of poor rains on production. About 80 percent of tobacco is grown under contract schemes, according to the TIMB.

Registered farmers increased by 44 percent to 170 169 farmers from 118 142 for last year.

Of the 170 842 registered growers, 41 552 are new. Farmers last year delivered a record 253 million kilogrammes of flue cured tobacco worth $737,2 million. Dr Matibiri said the TIMB is still consulting stakeholders on when the next season would start.

This season, tobacco farmers will retain 50 percent of their earnings in hard currency, from 30 percent the Reserve Bank of Zimbabwe initially announced in the Monetary Policy Statement. Central bank governor, Dr John Mangudya, said the move was meant to stimulate tobacco production and earn the country the badly needed forex.

The Reserve Bank also extended the period—from 30 days to 90 days—which tobacco farmers could keep their hard currency in their accounts before compulsory conversion to local currency at the prevailing exchange rate.

“This will actually give our farmers more time to plan how they want to use their money,” said Mr Zakaria.

Dr Mangudya also told our sister paper, Business Weekly on Thursday the 30-day period was not cast in iron as retained earnings could be kept longer in exceptional cases where such need arises to avoid choking companys’ operations.

Mr Zakaria has urged farmers to book their sale before delivering produce to avoid chaos at the marketing floors. “What we need is order at the floors,” he said.

“We have had farmers staying for longer periods at the floors because they would have not made pre-bookings. This will cause unnecessary congestion and chaos.

“Middleman have also taken advantage and this resulted in farmers being fleeced.

Apart from tobacco, other main sources of Zimbabwe’s foreign currency are gold and cotton.

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Source: . . changes an 'official recognition' of phenomena Monetary reforms influenced by earlier policies | Daily News

There’s nothing surprising or fundamentally new about the monetary and currency reforms that the Reserve Bank of Zimbabwe (RBZ) introduced in the 2019 Monetary Policy Statement.

I have restricted my focus to an interpretation of the monetary policy measures, unpacking the rationale and underlying policy objectives of the monetary measures, without looking at the effectiveness or implications of the changes.

I would personally describe the changes in two ways.

Market actors to unresolved structural imbalances such as foreign currency shortages, low foreign currency reserves and an overvalued exchange rate can see the reforms as an official recognition and formalisation of monetary developments that had already established an existence either as an inadvertent and unforeseen consequence of previous monetary actions or as a “rationale” response.

For instance, I prefer to see the establishment of the interbank foreign exchange (forex) market as the formalisation of the parallel market which came into being in 2016 when the RBZ technically de-dollarised the economy through the introduction of bond notes, supported by a US$200 million nostro facility of Afreximbank.

The same can be said of devaluation. After two years of adamant resistance, the RBZ has eventually succumbed to a series of speculative attacks on bond notes and RTGS (Real Time Gross Settlement) balances, and adjusted the peg to US$1:RTGS$2.5 from a parity position as a way to mitigate a structural currency crisis.

I’ve deliberately used the term “adjusted the peg” instead of liberaliing the exchange rate because it is not a “free float” as officially claimed.

Neither is it a “dirty float” manipulated from time to time by the monetary authorities to ensure that it fluctuates within a narrow band of pre-determined lower and upper limits.

If the exchange rate was a free float, devaluation would have been followed immediately afterwards by a depreciation, which would have brought it closer to the parallel market rate of around RTGS3.5 for every dollar, reflecting the country’s low forex reserve position.

On the contrary, the RTGS dollar has maintained a stable exchange rate in the official market and this reflects all the typical characteristics of a peg.

Although many people might be surprised by the rather absurd phenomenon of RTGS as a currency, it has been so since 2016 when the RBZ started creating unfunded transferable balances, ie, “nostro” balances not funded by cash US dollars.

From that point on, RTGS changed from a mode of transaction to a currency in itself.

In effect, the monetary authorities found RTGS to be a convenient instrument to informally reassert their seignorage power to “print money” and overcome the money supply constraints of dollarisation.

Through this seignorage power, transferable balances surged to nearly US$10 billion last year from around US$7 billion in 2016. The explosion in transferable balances was mostly a result of imprudent monetary and fiscal policies as well as speculative dealing in the forex black market.

As expected, the plan which initially appeared attractive and expedient soon plunged the monetary authorities into a dilemma.

Continuing with dollarisation meant they had to find the cash US dollars to fund the balances. Abandoning dollarisation means they had to officially recognise the black forex market and devalue the balances under a new currency regime.

For obvious reason, the RBZ has opted for the latter option, which is merely a formalisation of a market created and propagated by forex speculative dealers with full public acceptance and participation through a parallel market arrangement.

Similarly, bond notes, which were purportedly backed to the last cent by the Afreximbank nostro facility at inception, also ceased to be a fiat currency of nostro dollars (USD balances) and became a currency in themselves in 2017 when the RBZ failed to provide cash US dollars on demand due to depleted reserves.

The only difference between now and 2016 is that RTGS and bond notes are now officially recoginsed as currency. The bond note has changed from a fiat currency of nostro dollars to a fiat currency of RTGS dollars. The USD has also been turned into a fiat currency of the nostro dollars sitting in nostro foreign currency accounts.

According to this view, the new monetary changes are an “official recognition” of monetary phenomena, which already existed informally or a “shock correction” of unresolved monetary imbalances, which had reached unsustainable levels as the RBZ had not adequately addressed them on October 1, 2018.

The concept of “shock correction” does not always imply market-induced reform. In our case, it insinuates either a disruptive self-correction of monetary imbalances such as an overvalued exchange rate and unfunded transferable balances or a forced reform in cases where the imbalances had reached where “something’s gotta give”, what we can call the breaking point.

We can also look at the reforms more as an attempt to address the unintended consequences of monetary measures introduced on October 1, 2018 than a phased implementation of planned monetary reforms.

For instance, currency reforms had been deferred to three to five years to allow monetary and fiscal authorities to address fundamentals, in this case building reserves to at least three months of import cover.

The forex black market and its exchange premiums were overlooked. Since it was not considered a macroeconomic threat at the time, inflation was not adequate attention.

Paradoxically, the three issues have shown wicked tendencies through unintended consequences such as black market exchange rate-based pricing — what can be called “USD price benchmarking”— and informal re-dollarisation, which we can be viewed as “informal currency” reforms.

Put another way, most of the issues that the monetary and fiscal authorities neglected or overlooked on October 1, have been addressed by the market informally, resulting in “shock reforms”, which effectively undermined the official short-term stabilisation programme.

Speaking during the Daily News Monetary Policy Breakfast Review last week, RBZ governor John Mangudya admitted that the monetary measures have been designed to contend with unintended or unforeseen consequences when “the trajectory changed”.

“We thought we were going to have a better last quarter (of 2018), but it became inflationary,” Mangudya said.  “The trajectory changed.”

By implication, the current monetary reforms were not originally part of the short-term stabilisation plan and have been tailored to deal with what are generally known as wicked policy problems — challenges that are generally difficult to solve and often trigger unintended consequences.

With roots in the currency crisis, inflation and informal re-dollarisation and large forex spreads between the formal and informal markets have shown wicked tendencies.  Since October 1, 2018, inflation has changed from a monetary to an exchange rate phenomenon. Whereas the separation and “ring-fencing” of bank accounts into “nostro FCA” and “RTGS FCA” was purportedly intended to “support (stabilise) the multi-currency system”, it was widely construed as a technical reintroduction of local currency.

Convinced that the RBZ had no reserves with which to defend its 1:1 peg, speculators responded with “shock devaluation”.

In the same way, various market actors also stampeded to hedge themselves against loss of value through USD price benchmarking based on moving black forex market exchange rates.  Thus, any depreciation of the bond note/RTGS balances that occurred in the underground market is being passed through to and reflected in formal sector prices.

Although the RBZ calls this multiple pricing, the correct term is USD price benchmarking or exchange rate-based pricing, a phenomenon where prices creep in line with movements in the exchange rate. Import-depended sectors such as the pharmaceutical and automotive industries resorted to direct USD pricing.

Through these developments, hyperinflation has returned while the economy has progressively re-dollarised informally.

Thus, instead of stabilising the multi-currency system, the separation and ring-fencing of bank accounts paradoxically plunged the economy into hyperinflation and deepened the currency crisis through a shock devaluation.

The current monetary measures can therefore best be described as “fire-fighting”.

The monetary authorities are trying to build “sandboxes” around all highly inflammable points of the crisis.

The original plan was to continue with the multi-currency system until they had successfully “stopped the bleeding” in the economy, to use the words of Mthuli Ncube, the minister of Finance. From a fiscal perspective, the original plan was focused on achieving three objectives: narrowing government deficit, reducing government debt and reducing trade deficit.

In fact, the whole plan was all about fiscal consolidation, dragging government out of debt and stabilising fundamentals by increasing government revenues and expunging its debts.

The monetary authorities were mostly concerned with building foreign currency reserves in order to support the multi-currency system and pave the way for longer-term currency reforms.

The plan caught fire within weeks and gutted the economy, prompting the current fire-fighting measures.

While the monetary and fiscal authorities have not really abandoned their original plan to defer currency reforms to three to five years and focus on fiscal consolidation in the meantime, they had to find a way to stop informal re-dollarisation and USD price benchmarking.

The most convenient way has been to recognise RTGS and bond notes as currency and embrace devaluation for two reasons.

On one hand, they want every economic actor to use RTGS dollars for all domestic transactions, restricting US dollars to a reserve currency.

What is not immediately apparent is whether the RTGS dollar is merely a new addition to the multi-currency system or whether the multi-currency system has been completely abolished.

One the other hand, the monetary authorities want all those selling or looking for foreign currency to use the interbank forex market.

The devaluation policy has also made it possible to establish a forex interbank market.

Contrary to belief, both devaluation and the forex interbank market are not equal to liberalisation.

Rather, the two measures are meant to deal with one of the most adverse consequences of the separation and ring-fencing of bank accounts. Since October 1, 2018, nostro balances have been accumulating in nostro FCAs and remained dormant since the two ring-fenced accounts could not trade with each other.

In just four months, nostro balances hit US$600 million, which the RBZ had no access to.

Apart from what it bought from exporters through statutory surrender requirements, the RBZ limited access to foreign currency, leading to critical reserve depletion.

The monetary authorities had to find a way of opening the nostro balances to forex trade and created a market — the interbank market — in which they are the biggest participant.

The whole idea is buy the bulk of the foreign currency in the interbank market at a controlled exchange rate in addition to what they acquire through revised export surrender requirements, hoping to progressively build reserves through the two instruments.In other words, the design of the monetary reforms has to a larger extent been influenced by unintended consequences of earlier policy actions or issues that were previously glossed over.

Little wonder, currency devaluation and inflation control are now a key part of the revised short-term stabilisation programme, now built around five action areas:

• To stop informal re-dollarisation

• To stabilise prices

• To gain greater access to nostro balances through the interbank market

• To build reserves in preparation for the introduction or real local currency

• To paralyse the parallel forex market.

In the next article, I will analyse whether the monetary authorities will be able to achieve these policy objectives, pointing out the challenges and suggesting alternative options.

n Mugowo is an economist and researcher. He is currently the Managing Consultant of Ziostats P/L, the thinktank of Ziopra consulting Group. He can be reached at munya.mugowo@gmail.com. Twitter @mugmugo.

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Source: Zim has lurched into a water crisis | Daily News

Nearly every municipality in Zimbabwe is grappling with a water crisis, putting lives in great danger.

In January this year, Bulawayo City Council (BCC) instituted a 48-hour water rationing exercise as its water sources have gone down due to erratic rains.

So severe is the situation in Bulawayo, in particular, that United Bulawayo Hospitals (UBH) has been forced to suspend all its surgical operations.

UBH chief executive officer Nonhlanhla Ndlovu recently told the media that the water crisis had severely incapacitated one of the southern region’s top hospitals.

“The city council’s water-shedding hasn’t spared us. We don’t have water. Council is also not supplying us with water bowsers to alleviate the problem. We are finding it hard to fill up containers with water. We just hope the period won’t extend further because the situation will be out of control,” said Ndlovu.

A few days after BCC started rationing water, the Harare City Council (HCC) followed suit.

HCC has advised its residents that Lake Chivero — its main water source — has water supply for only 18 months at its current levels.

Other local authorities have reduced their water supply owing to low water levels at their supply dams.

The escalating water crisis in almost all local authorities, according to the Community Water Alliance (CWA), could be a precursor to a national disaster.

“The majority of local authorities in the country are proposing water rationing and this is likely to cause a health disaster if the situation is not handled properly.

“The crisis is manifesting through dwindling water levels in dams where local authorities abstract water for treatment before distributing to citizens,” said CWA chairperson Hildaberta Rwambiwa.

She added that dam level averages throughout the country were far from encouraging.

“Besides dwindling water levels in dams; there is serious siltation in dams, very high water pollution levels, poor catchment management and wetlands depletion, poor quality of potable water, insufficient potable water, obsolete infrastructure, crisis of foreign currency availability for water treatment chemicals, poor funding for water projects, downgraded sewerage and water treatment plants,” said Rwambiwa.

CWA has warned that unless the water crisis in the country is attended to, a disaster looms.

Rwambiwa told the Daily News on Sunday that there is an escalating water crisis in every local authority.

CWA also wants to see enhanced transparency and accountability in the way water system is administered.

The organisation’s programmes manager, Hardlife Mudzingwa said loan agreements and guarantees being concluded by the government for the water sector were not being published in the Government Gazette within 60 days in line with the Constitution

The CWA programmes manager also bemoaned the lack of meaningful fiscal support to address the water supply crisis. Finance minister Mthuli Ncube only allocated 2,7 percent of his budget to water and sanitation despite the country’s typhoid and cholera history.

“In essence, there is no water fund. Water and sanitation projects are huge capital projects that require money from central government.

“Local authorities will not, on their own, manage to raise those funds. The 2018 Service Level Benchmarking report by the Urban Councils Authorities of Zimbabwe revealed that on average Zimbabwe’s local authorities are losing 43 percent of water produced through leakages and unaccounted for loses.

“The same report revealed that proper solid waste management has dropped from 93 percent to 78 percent. This means that a lot of potable water is lost through leakages, illegal connections and also that the condition of raw water within local authorities will continue to deteriorate. If local authorities remain contained in the vicious cycle of water pollution and request for foreign currency at the Reserve Bank of Zimbabwe, the challenges on water and sanitation will persist,” Mudzingwa said.

A schedule by the Zimbabwe National Water Authority (Zinwa) indicated that catchment area averages were low this year with Gwayi Catchment at 62,1 percent, Manyame Catchment (88,7), Mazowe Catchment (92), Mzingwane Catchment (66,8), Runde Catchment (56,7), Sanyati Catchment (72,3) and Save Catchment (65,8).

Last year, the dam level averages were much higher with the Manyame catchment’s dam level average standing at  92,1 percent, Gwayi Catchment (67,3), Mazowe Catchment (90,4), Mzingwane Catchment (84,3), Runde Catchment (53,6), Save Catchment (78, 3) and Sanyati Catchment (76,3) respectively.

Zinwa’s corporate communications manager Marjorie Munyonga told the Daily News on Sunday that a significant number of dams still hold sufficient water to meet the country’s agricultural and domestic needs.

She, however, conceded that some dams may not be able to sustain demand until the coming rain season.

“It follows that when we have depressed dam levels, there is bound to be scarcity in some areas. However, it is not all the users that will be affected as some dams still have water.

“The major challenge that we have at the moment is not about the number of dams per se, but the limited rains that the country is receiving. The largely below normal rains have thus led to depressed inflows into the dams,” she said.

Munyonga added that the government was also in the process of constructing new dams in needy areas.

“Of course there are places which are in need of new water bodies and government is already making strides towards the construction of such water infrastructure.

“Among these places are Rushinga where Semwa Dam is already under construction, Murambinda where Marowanyati Dam is substantially complete and has already started impounding water and Bulawayo where Gwayi Shangani is also under construction,” she said.

But in the meantime, she said demand management may come to the fore in the face of limited water, adding, though, that the process shall be guided by the law and other principles of Integrated Water Resources Management.

“Our solutions to the problem shall be guided by the Zinwa Act and the Water Act which mandate Zinwa to ensure that the impact of floods and droughts are mitigated. The authority will continue to closely monitor the situation and come up with solutions that may include the drilling of boreholes for communities, connecting centres to new raw water sources and rolling out awareness campaigns among water users on the need to conserve the resource. In all the interventions that the authority will make, saving human lives shall be a top priority,” said the Zinwa corporate communications manager.

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After MDC Alliance leader Nelson Chamisa announced that the party will hold its congress between May 24 and 26 to choose the late Morgan Tsvangirai’s successor, interest in who will be the next leader of Zimbabwe’s main opposition party has ballooned. Chamisa, who took over from Tsvangirai under controversial circumstances following the former prime minister’s […]